Correlation Between AFFLUENT MEDICAL and Talanx AG

Can any of the company-specific risk be diversified away by investing in both AFFLUENT MEDICAL and Talanx AG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AFFLUENT MEDICAL and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AFFLUENT MEDICAL SAS and Talanx AG, you can compare the effects of market volatilities on AFFLUENT MEDICAL and Talanx AG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AFFLUENT MEDICAL with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFFLUENT MEDICAL and Talanx AG.

Diversification Opportunities for AFFLUENT MEDICAL and Talanx AG

-0.86

Correlation Coefficient

AFFLUENT MEDICAL  Talanx AG

Pay attention - limited upside

The 3 months correlation between AFFLUENT and Talanx is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AFFLUENT MEDICAL SAS and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and AFFLUENT MEDICAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AFFLUENT MEDICAL SAS are associated (or correlated) with Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of AFFLUENT MEDICAL i.e., AFFLUENT MEDICAL and Talanx AG go up and down completely randomly.

Pair Corralation between AFFLUENT MEDICAL and Talanx AG

Assuming the 90 days horizon AFFLUENT MEDICAL SAS is expected to generate 3.23 times more return on investment than Talanx AG. However, AFFLUENT MEDICAL is 3.23 times more volatile than Talanx AG. It trades about 0.16 of its potential returns per unit of risk. Talanx AG is currently generating about -0.05 per unit of risk. If you would invest  126.00  in AFFLUENT MEDICAL SAS on October 10, 2024 and sell it today you would earn a total of  13.00  from holding AFFLUENT MEDICAL SAS or generate 10.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AFFLUENT MEDICAL SAS  vs.  Talanx AG

AFFLUENT MEDICAL SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AFFLUENT MEDICAL SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Talanx AG

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Talanx AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Talanx AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AFFLUENT MEDICAL and Talanx AG

The main advantage of trading using opposite AFFLUENT MEDICAL and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFFLUENT MEDICAL position performs unexpectedly, Talanx AG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Talanx AG will offset losses from the drop in Talanx AG's long position.

The idea behind AFFLUENT MEDICAL SAS and Talanx AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.